Is a Profitable Home Business Attainable?

Yes. Many people are running a successful, profitable home business. You can too.

Let's start with defining what a profitable home business is. While this may seem like a no-brainer, let's review the basics first to make sure we're on the same page.

Simply put, your home business is profitable when the money you generate from you business (revenue) is greater than the money you spend on running your business (expenses):

Revenue - Expenses = Profit (or Loss)

For example, say your home business generated $1,000 last month. In that same month you spent $850 on your business:

$1,000 - $850 = $150

Your profit for last month was $150

One point worth mentioning here is that if you want to know whether or not you are running a profitable home business, you need to keep track of the revenue and expenses that you generate.

There are many ways to track your revenue and expenses. For example, you can use Quicken, create an Excel spreadsheet, or pay someone else to do this for you. Regardless of the method you choose, you need to keep receipts for all of the expenses you incur for your business. You also need to keep some type of documentation for every sale that you make.

How Do I Know if I've Chosen a Profitable Home Business?

The simple answer to this question is: Plan to have a profitable home business. How? Write a business plan for your home business. A complete, working business plan can help you determine how you're going to run a profitable home business.

Your business plan can also help you determine whether or not you will need to run you business at a loss for a specific period of time as you build it. Keep in mind that many small businesses operate at a loss for 3 to 5 years before realizing a profit.

Are you shocked by this statistic? You might be thinking, "Well, forget it. I'm not going to loose money for 3 years before I start making money!" If you are thinking along these lines, good - this indicates that you're not going to throw money away.

One of the attractive aspects of having a business from home is that one's overhead (i.e., expenses) are a lot lower compared to small businesses operating out of an office.

There are many home businesses from which a person can choose that, if run well, can generate a profit much sooner than the average statistic for small business.

Planning is key. I cannot stress this enough. If you want to have a profitable home business, then plan who, what, where, when, and how for your business. There are resources on this site to assist you with creating your business plan. Click here for help: Business Plan.

Again, keeping track of your business is important if you want a profitable home business. Take the time to enter your business expenses and revenue in some type of spreadsheet every month. Know for every given month whether or not you're running a profitable home business.

The side benefit of keeping track of your expenses every month is that when tax time comes around, you've already got all your expenses documented in one place (versus scrambling around to find all of your receipts and adding them up).

How Do I Sift Through All of the Hype and Select a Profitable Home Business?

This is an excellent question. Let's spend some time, here on this page, answering it.

Let me first point out that I have seen it all. Because of my solid business background and education I can see a shaky business opportunity a mile away. Even if a particular program seems interesting I always take the time to research it. I am happy to report that I have never been "suckered into" any business venture. Make sure that you are not as well.

The reality: there are a lot of shaky business opportunities out there such as gifting programs, programs that require thousands of dollars of initial investment, and down right scams. How do you ensure that you're not a victim of anything that is not legitimate in your quest for a profitable home business? Follow these steps:

6 Steps to Finding a Legitimate Home Business:

1) Are the people and/or the company associated with the profitable home business you're considering reputable? To find out do the following:

Research the backgrounds of the people associated with the business venture you're considering. Use the Internet - do a search on the people and the company. Also ask if they are running a profitable home business.

Is the company a member of the Better Business Bureau? Have any complaints been filed against the company?

Check with your local chamber of commerce regarding what information they have about the company.

How long has the company been around? This may be an important aspect of which business you choose. However, if you're trying to start something from scratch, it may not be. Use your best judgment, but be careful not to get into something shaky - if it sounds too good to be true, it probably is.

2) How much money are you willing to spend to get started? How much money are you willing to spend on your business each month?

Decide what you're willing to spend to get started before you start considering businesses. Meaning establish a budget up front. If you see any businesses that require more money, you may want to pass on the opportunity.

Establish an amount you're willing to spend on your business each month so that you're running a profitable home business. Consider that you may have to purchase or produce product every month, advertise, buy office supplies, incur postal related expenses, have internet and telephone costs, etc.

3) Choose a product or service that you can promote with confidence.

Make sure you see the value in the product or service. Is it something you would spend money on even if it were not your business? Better yet, choose something about which you are passionate. You'll be able to promote it better and your interest in your business will be long lasting.

4) Be clear on what target market to which your product or service appeals. Is this group big enough for you to generate the kind of income you want?

5) Avoiding pyramid schemes:

True pyramid schemes are illegal. However, many people confuse network marketing (also known as multi-level marketing) with pyramid schemes.

In reality, it is not the structure of the organization that is questionable. Every viable organization takes on the shape of a pyramid. The president at the top has several department heads under him, who each have several managers, who supervise teams of employees, etc.

Again, it's not the structure with which people really have an issue - it's the lack of value that is the problem. There have been plenty of network marketing businesses created where the product or service does not have enough value to warrant the compensation that is passed up and down the lines of people involved. And all of those businesses that lacked sufficient value have given network marketing a bad name.

However, there are many companies that continue to successfully distribute their products with a network marketing (or multi-level marketing) business model. The product or service is of good value and people involved are compensated fairly.

In fact, we all engage in network marketing on a regular basis. When is the last time you saw a good movie or went to a nice restaurant and told someone about your experience? Do you get a commission from that movie theater or restaurant if someone you've referred to them becomes one of their customers? No, you don't. But, you are network marketing.

I am not here to sell you on network marketing. There are plenty of ways to earn an income from home without getting involved in network marketing. Also, I'll be the first to say network marketing is not for everyone.

However, don't discount network marketing as being fraudulent. It is a viable business model that when done correctly 1) enables people to earn a good living doing work they enjoy, and 2) provides the consumer a good value for the product or service being sold.

6) Do you have access to high quality marketing strategies and ongoing training and support?

If you're choosing a business program offered by a company, make sure that company provides you with a fully automated, professional website and internet tools that do all the promoting and background work for you. You should not have to pay a lot for these tools.

Also make sure the company provides training and ongoing support at either no additional cost or a very nominal charge.

If you choose a business where you're essentially "on your own," get the training you need. Browse this site for resources.

If you still feel you need more information, contact me. I am here to help.

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